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Definition of Dividend income
income that a company receives in the form of dividends on stock in other companies that it holds.
A dividend paid in cash to a company's shareholders. The amount is normally based on
A requirement that any missed preferred or preference stock dividends be paid
A formula to estimate the intrinsic value of a firm by figuring the
A dividend is a portion of a company's profit paid to common and preferred shareholders. A stock
With respect to a project financing, an arrangement under which the sponsors of a project
A group of shareholders who prefer that the firm follow a particular dividend policy. For
A model for valuing the common stock of a company, based on the
A model wherein dividends are assumed to be at a constant rate in perpetuity.
A bond covenant that restricts in some way the firm's ability to pay cash dividends.
Percentage of earnings paid out as dividends.
Amount of cash paid to shareholders expressed as dollars per share.
An established guide for the firm to determine the amount of money it will pay as dividends.
The fixed or floating rate paid on preferred stock based on par value.
Automatic reinvestment of shareholder dividends in more shares of a
A shareholders' rights to receive per-share dividends identical to those other shareholders receive.
Dividend yield (Funds)
Indicated yield represents return on a share of a mutual fund held over the past 12
Dividend yield (Stocks)
Indicated yield represents annual dividends divided by current stock price.
Dividends per share
dividends paid for the past 12 months divided by the number of common shares
Cash flow plus change in present value.
Extra or special dividends
A dividend that is paid in addition to a firm's "regular" quarterly dividend.
This literally means "without dividend." The buyer of shares when they are quoted ex-dividend
The first day of trading when the seller, rather than the buyer, of a stock will be entitled to
Also called a busted convertible, a convertible security that is trading like a straight
Assets that pay a fixed-dollar amount, such as bonds and preferred stock.
The market for trading bonds and preferred stock.
Sale of some shares of stock to get cash that would be similar to receiving a cash dividend.
One who receives income from a trust.
A bond on which the payment of interest is contingent on sufficient earnings. These bonds are
A mutual fund providing for liberal current income from investments.
Income statement (statement of operations)
A statement showing the revenues, expenses, and income (the
Common stock with a high dividend yield and few profitable investment opportunities.
Total amount of dividends that would be paid on a share of stock over the next 12 months
The revenue from a portfolio of invested assets.
Payment by a firm to its owners from capital rather than from earnings.
Monthly income preferred security (MIP)
Preferred stock issued by a subsidiary located in a tax haven.
The company's total earnings, reflecting revenues adjusted for costs of doing business,
Perfect market view (of dividend policy)
Analysis of a decision on dividend policy, in a perfect capital
Residual dividend approach
An approach that suggests that a firm pay dividends if and only if acceptable
Signaling view (on dividend policy)
The argument that dividend changes are important signals to investors
Also referred to as an extra dividend. dividend that is unlikely to be repeated.
Also called margin income, the difference between income and cost. For a depository
Payment of a corporate dividend in the form of stock rather than cash. The stock dividend
Tax differential view ( of dividend policy)
The view that shareholders prefer capital gains over dividends,
Gross income less a set of deductions.
Traditional view (of dividend policy)
An argument that "within reason," investors prefer large dividends to
For an insurance company, the difference between the premiums earned and the costs
Purchase of shares in which the buyer is entitled to the forthcoming dividend. Related: exdividend.
A payment a company makes to stockholders. Earnings before income tax. The profit a company made
An accounting statement that summarizes information about a company in the following format:
What the business paid to the IRS.
The profit a company makes after cost of goods sold, expenses, and taxes are subtracted from net sales.
RATIO OF NET INCOME TO NET SALES
A ratio that shows how much net income (profit) a company made on each dollar of net sales. Hereâ€™s the formula:
RATIO OF NET SALES TO NET INCOME
A ratio that shows how much a company had to collect in net sales to make a dollar of profit. Figure it this way:
The payment of after-tax profits to shareholders as their share of the profits of the business for an accounting period.
Residual income (RI)
The profit remaining after deducting from profit a notional cost of capital on the investment in a business or division of a business.
Amounts paid to the owners of a company that represent a share of the income of the company.
One of the basic financial statements; it lists the revenue and expense accounts of the company.
income that a company receives in the form of interest, usually as the result of keeping money in interest-bearing accounts at financial institutions and the lending of money to other companies.
The last line of the income Statement; it represents the amount that the company earned during a specified period.
dividend payout ratio
Computed by dividing cash dividends for the year
dividend yield ratio
Cash dividends paid by a business over the most
earnings before interest and income tax (EBIT)
A measure of profit that
Financial statement that summarizes sales revenue
net income (also called the bottom line, earnings, net earnings, and net
dividend growth method
a method of computing the cost
the profit earned by a responsibility center that exceeds an amount "charged" for funds committed to that center
current compensation that is taxed at a future date
current compensation that is never taxed
A security that pays a specified cash flow over a
A payment made to shareholders that is proportional to the number of shares
Net earnings after all expenses for an accounting period are subtracted from all
A financial report that summarizes a companyâ€™s revenue, cost of
A government tax on the income earned by an individual or corporation.
The excess of revenues over expenses, including the impact of income taxes.
The net income of a business, less the impact of any financial activity,
Payment of cash by the firm to its shareholders.
common-size income statement
income statement that presents items as a percentage of revenues.
constant-growth dividend discount model
Version of the dividend discount model in which dividends grow at a constant rate.
Periodic cash distribution from the firm to its shareholders.
dividend discount model
Computation of todayâ€™s stock price which states that share value equals the present value of all expected future dividends.
dividend payout ratio
Percentage of earnings paid out as dividends.
Date that determines whether a stockholder is entitled to a dividend payment; anyone holding stock before this date is entitled to a dividend.
Financial statement that shows the revenues, expenses, and net income of a firm over a period of time.
information content of dividends
dividend increases send good news about cash flow and earnings. dividend cuts send bad news.
MM dividend-irrelevance proposition
Theory that under ideal conditions, the value of the firm is unaffected by dividend policy.
Also called economic value added. Profit minus cost of capital employed.
Distribution of additional shares to a firmâ€™s stockholders.
income less income tax.
Profits paid out to shareholders by a corporation.
A policy designed to lower inflation without reducing aggregate demand. Wage/price controls are an example.
GDP with some adjustments to remove items that do not make it into anyone's hands as income, such as indirect taxes and depreciation. Loosely speaking, it is interpreted as being equal to GDP.
National Income and Product Accounts
The national accounting system that records economic activity such as GDP and related measures.
Permanent Income Hypothesis
Theory that individuals base current consumption spending on their perceived long-run average income rather than their current income.
income expressed in base-year dollars, calculated by dividing nominal income by a price index.
Tax-Related Incomes Policy (TIP)
Tax incentives for labor and business to induce them to conform to wage/price guidelines.
Employee Retirement Income Security Act of 1974 (ERISA)
A federal Act that sets minimum operational and funding standards for employee benefit
Accumulated Other Comprehensive Income
Cumulative gains or losses reported in shareholders'
Adjusted Income from Continuing
Operations Reported income from continuing operations
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